There are several ways to measure the returns of any project. Some are more accurate than others. One of the best ways is the equity multiple. In its simplest calculation, it is the total returns you receive divided by the capital invested. For example, if you receive a total of $250,000 of distributions and your initial investment was $100,000 then your equity multiple is 2.5. 

It does however have a down side. TIME. 

If your equity multiple is 2.5 like the example above but it takes you 10 years to achieve it, it's not the same as achieving it in 5 years. 

Time is one key factor you should use when analyzing deals.

How long will it take to receive your equity multiple? 

 

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